According to the latest report from the Vietnam Real Estate Brokers Association, rapid economic development and urbanization have led to a sharp increase in housing demand, while land supply is running out and the supply of housing is continuously decreasing due to slow project implementation. Since the beginning of the year, the prices of apartment buildings in Hanoi and Ho Chi Minh City have continued to rise beyond the ability of many households to afford. One of the reasons for the rapid increase in house and apartment prices in recent times is the imbalance in the luxury and high-end product market, as well as the lack of affordable housing options.
Social housing in Dai Kim – Hoang Mai – Hanoi with an original price of more than 14 million dong/m2 (photo: Ngoc Mai).
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, believes that high-end housing should only account for a small proportion, but for many years it has dominated 70-80% of the market supply, leading to speculation, hoarding, and pushing real estate prices high.
“According to the law of supply and demand, due to a lack of housing supply while demand is high, especially for affordable housing, house prices have continuously increased in recent years at an average annual rate of about 10%,” Mr. Chau shared.
In response to the irrational structure of the market, from the beginning of the year, the Prime Minister has instructed the Ministry of Construction to guide businesses in restructuring segments, lowering prices, and implementing appropriate, timely, and effective solutions to restructure segments for those in real need, social housing, housing for workers, and low-income people.
According to a report from the Ministry of Construction, this year Hanoi has registered to complete 3 social housing projects with nearly 1,200 apartments, and Ho Chi Minh City has registered to complete 6 projects with a scale of nearly 3,800 apartments. According to the Prime Minister’s Plan to complete 1 million social housing units by 2030, Hanoi’s target is 18,700 units and Ho Chi Minh City’s target is more than 26,000 units.
Mr. Hoang Hai, Director of the Housing and Real Estate Market Management Department, Ministry of Construction, said that after implementing the VND 120,000 billion preferential credit package, 27 provinces have announced a list of 63 social housing projects that meet the conditions for borrowing under this program, with a capital demand of VND 28 thousand billion.
“Some projects in localities have disbursed this credit package. If the projects have been licensed and approved for investment policy and are completed on time, we will basically achieve the target by completing 428,000 apartments by 2025. In the near future, the Ministry of Construction will coordinate more closely to expedite the progress of investment in social housing projects, ensuring the timely provision of credit to disburse the preferential package,” Mr. Hai said.
Mr. Hoang Hai also predicted that in 2024, housing prices will be at a moderate level, and social housing will be one of the bright spots in the market as many projects have been approved for investment policy, selecting investors, and many projects will commence construction in 2024.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, forecasts that in the short term, apartment prices in the downtown areas of major cities will continue to rise, especially in the affordable and mid-range segments, while the prices of high-end luxury projects may experience a slight decrease.
